Sebi cautions investors against unregulated opinion trading platforms

The Securities and Exchange Board of India (Sebi) on Tuesday cautioned investors against ‘opinion trading platforms’ as they do not fall under the regulatory purview and lack an investor protection mechanism. The market regulator also advised recognised stock exchanges to initiate action against such platforms.

 

These platforms allow people to trade or enter into arrangements where the payout is dependent on the outcome of a “yes” or “no” proposition regarding an underlying event—placing trades on the proposition whether it happens or not. Such platforms may resemble an investment platform by using terms such as profits, stop loss, trading, etc.

 

 

“Opinion trading does not fall within the regulatory purview of Sebi, as what is traded is not a security,” said the regulator.